Woolworths has said it will raise the price of fresh milk in stores. (AAP Image/Dan Himbrechts)

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Shock supermarket price hike for Woolies

by Benedict Brook

18th Feb 2019 10:13 AM

IT WAS the product at the centre of the supermarket wars but now Woolworths has run up the white flag, this morning making the shock decision to raise the price of milk.

From tomorrow $1-a-litre milk will be axed in Woolies stores. The dairy staple will go up by 10c per litre.

A two-litre bottle of milk will cost $2.20 and a three-litre bottle $3.30.

The move applies to Woolworths branded milk only.

The supermarket giant has said the move will benefit struggling farmers who will receive "every cent" of the price increase.

Coles and Woolworths have been under increasing pressure to raise the cost of fresh milk by the dairy industry that have said $1 a litre is unsustainable.

Last week, Australia was shocked by images of thousands of dead cattle drowned by floods in northern Queensland.

Woolworths has said it will raise the price of fresh milk in stores. (AAP Image/Dan Himbrechts)

Woolworths Group CEO Brad Banducci said times remained tough for farmers: "This is affecting milk production and farm viability, which is devastating for farmers and the regional communities in which they live. It's clear something needs to change and we want to play a constructive role in making this happen.

"We believe the long term sustainability of our dairy industry - and the regional communities they help support - is incredibly important for Australia."

Mr Banducci said the price hike would deliver higher milk prices to more than 450 Australian dairy farmers supplying Woolworths branded fresh milk.

"While we're realistic this won't solve broader structural issues, we hope it will help inject much needed confidence into the sector and the regional communities dairy farmers do so much to support," he said.

The price of Woolworths own label milk will go up by 10c per litre.

Coles was the first supermaket to cut milk to $1 a litre. The move in January 2011 caused waves throught the dairy industry and led rivals to similarly drop thier milk prices.